USING QUICKBOOKS TO TRACK ASSOCIATION FINANCES

Transcription

1 FINANCIAL MANAGEMENT USING QUICKBOOKS TO TRACK ASSOCIATION FINANCES Presented by: Presenter Heather L. Cozby, CPA CAI National Business Partners Council Member CAINE Program Committee CAINE Speaker & Author Massachusetts Society of Certified Public Accountants American Institute of Certified Public Accountants (508)

2 Presentation Format Present a section Show examples in working QuickBooks file Brief questions at the end of each section Last ½ hour for open ended discussions/questions Workshop Goals Geared for smaller management companies and selfmanaged associations with working knowledge of QB Overview of types of programs to choose from Provide tips for setting up your file Provide tips for practical operational issues Provide insights into features that can streamline and enhance the financial information for associations Provide resources for additional information 2

3 Section 1 QuickBooks: Which Program to Pick? QuickBooks Online Options QuickBooks Online Simple Start/Essentials/Plus Smaller, self-managed associations Pay monthly fee appox $12-$40/mo per company In the Cloud, automatically backed up Decision Makers can all access directly without having to get a backup and restore and can manage by changing passwords Existing file can be restored into Online program 3

4 QuickBooks Purchased License QuickBooks Premier Smaller management company or large self-managed association with multiple entities One time fee based on number of users $399 1user - $1,999 5 user Users based on number of people needing concurrent access Unlimited number of company files can be created No requirement to upgrade in future (support avail. for 3 years) Contractor Module has insurance certificate tracking Install on local computer or on a hosted desktop Discounted Pricing Purchasing through a QuickBooks ProAdvisor will get you a discount. See flyer for discounted pricing and to utilize. Disclosure: I do not personally benefit, in any way, from QuickBooks by providing this or when someone purchases uses this flyer. 4

5 Accessibility Issues In today s environment of need info now, there are many ways to provide access to key users and decision makers while mitigating costs and not compromising security Hosted Desktop Accessed through Internet Remote Desktop Program Use Internet to Access Computers Where Data Resides (they have a Free version) Backups: Have a Plan and Test It Server environment the system should be getting backed up already, but generating backups from within QuickBooks is still critical. Create a plan to make backups from within the program regularly. Test the backup by restoring it at least quarterly. Many times you will only find out a file is corrupt by testing the restore. 5

6 End of Section 1 Questions? Section 2 Setup Tips 6

7 Chart of Accounts/Structure Only keep accounts you that expect to use, make accounts not in use inactive Keep the activity in your Profit & Loss for Operating Activities only Utilize Transfer/Contra accounts move Reserve activities to the Reserve Fund in Equity on your Balance Sheet (more later) Utilize subaccounts to logically group and rollup/collapse data into meaningful totals Customers: Profile by Unit vs Name Does anyone keep the customer data based on unit? For example the same customer file is used and name changed when owner changed? Strongly suggest keeping customer files based on each unit owner. When the unit owner changes, the new owner gets a new profile. Make old customer file inactive once balance is zero. History will be preserved in general ledger correctly. If you keep your info by unit, when you change the name of owner, all prior invoices and payments will have their name changed. This makes the records unauditable. Unit owner notes/leases/or other unique items will be preserved. You can still use unit # in search field for easy searching. 7

8 Customers: Features to Check Out Customer Center Notes Tenant info, unique issues, document calls Attach Feature Attach leases and other documents Word Custom Letters-incorporate all standardized letters (including 6D s) as templates and produce for a single unit owner, or all unit owners, when you need them. Gather address and send invoices, statements, or letters automatically electronically. A little up front time to set these features up properly will save hours and mailing costs later. Vendors: Use the Contractor Module Insurance Certificate Tracking Liability & W/C Only one version of QuickBooks incorporates this time consuming task automatically for you: QuickBooks Premier Contractor Module Change file to Contractor Module File/Toggle to Another Edition/Contractor Go to Vendor/Edit Vendor/Additional Info Enter expiration dates for Liability and W/C policies Scan and attach certificates to Vendor file When policy expires, you will be prompted by QuickBooks when you try to pay them. You can also do custom reports based on these fields. 8

9 Vendors: Other Features to Check Out Attach Feature Ins Cert s, W9, anything in their file W9/1099 Tracking Enter 1099 information on Vendor Additional Info Tab Review vendor list each year and make old vendors inactive regularly. Word Put your standard letters in as custom letters to save time. Request for W9/Insurance Certificates, change of address letters, transition letters. End of Section 2 Questions? 9

10 Section 3 Operational Tips Budget Feature Use the Profit & Loss Budget for the Operating Budget Use a spreadsheet for the Reserves Budget Profit & Loss Budget Performance Report Month Actual vs Budget YTD Actual vs Budget Annual Budget Company/Planning & Budgeting/Setup Budget 10

11 Reserve Fund Tracking Chart of Accounts Use Equity Accounts and Subaccounts Reserve (Equity Type of Account) Beginning Balance (subaccount) Contributions (monthly transfers as contra to operating assessments) Interest Earnings (post monthly income from savings accounts here) Expenditures (post capital reserve expenditures here) This section of Equity in the Balance Sheet becomes the Reserve Profit & Loss as all activity is captured here. Close out the reserve equity accounts to the beginning balance account on 1/1/xx. (Do manually by Journal Entry) Create a schedule in Excel to recap Reserve Activity for Board Members. Make this a part of the monthly reporting package. Owner Assessments Create monthly invoices for each unit owner, even if you don t actually mail them. Utilize Memorized Transactions to make monthly invoicing streamlined. Lists/Memorized Transaction List Make a New Group called Monthly Invoicing Create the invoice for each unit owner and memorize it into the group They can be automatically set to instead of print 11

12 Owner Assessments/6D s Have the Association s attorney draft the 6D to be used. Add the 6D as a Custom Letter in the Customer Center. Consider have the Board grant authority for the manager or bookkeeper to sign the 6D. Print a Statement to support the balance reported on the 6D. Scan and attach the executed 6D and backup support to the customer file. Edit the Memorized Invoice List to remove the old owner and add the new owner for the next month of assessments. Bills/Contracts Scan & Attach Here are some ways to make the information more transparent and accessible for others Scan the invoices for bills to be paid and attach them to the bill. Benefits: If a bookkeeper is doing the data entry, a manager can access the QB file remotely review A/P and make notes directly on the attachment, provide approvals, or attach any additional documents necessary to document the transaction such as contracts/proposals. The attached items will not be included in a backup file, but you can copy the folder and provide with the backup for a CPA to use at yearend. Takes just a little work to have same folders mapped. Scan the insurance policies and attach to the first bill of the policy. Scan contracts and attach them to the first bill of the payment agreement or the vendor file. Anything you go to a file cabinet to get, or keep electronically, be creative and try to scan and attach inside QuickBooks. 12

13 Reporting Automate/Memorize Are you doing the same custom filters/edits to create your monthly reporting package? Create and memorize reports using Last month for the time period and you monthly report will automatically come up with the correct date range each time it is run. Make any additional edits to the header/footer like Unaudited or For Management Use Only or Restricted to Board Members Only so they always appear each time the report is run. Create a Memorized Report Group called Monthly Reports and memorize each report into this group. At end of month run each report and export it to an excel file. Each report on a separate tab. Print entire workbook to a pdf ( End of Section 3 Questions? 13

14 Section 4 Resources for Additional Information CAI Great Resources Foundation for Community Association Research Free Best Practices Reports to download New England Chapter of CAI Education Programs Condo Media Articles Business Partners of CAI They re not just vendors 14

15 AICPA/FASB (What CPAs Use) cirawiki.aicpa.org Common Interest Realty Association Wiki Free resource from AIPCA used to educate CPAs on the community association environment Explains all major accounting and disclosure requirements Find out why your CPA makes you do things a certain way and what they are looking for when they perform their work. HOAPulse.com Excellent resource for articles regarding HOA s from a CPA perspective. Excellent author Gary Porter, CPA 15

16 Additional Items QB Discounting Purchasing Flyer What is the Difference Between a Compilation, a Review, and an Audit? Comparative Overview QUESTIONS? (508) heather@cozbycpa.com 16